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More Martin Hits Coming?

Federal Communications Commission (FCC) Chairman Kevin Martin reportedly is gearing up to hit MSOs with more regulations due to fears that the cable industry has become too large and powerful.

According to The New York Times, the FCC believes its conclusions will justify a new set of rules and proposals, including a cap that would hinder further growth of Comcast Corp. (Nasdaq: CMCSA, CMCSK), the industry's largest cable operator. Comcast is the only operator near the present 30 percent cap. There's also speculation that new agency rules could force MSOs to carry the NFL Network and other independent programmers that have had difficulty striking carriage deals.

The provision for broader regulatory authority would be invoked under a "70/70" rule of the Cable Act of 1984, which, as the paper points out, may allow more new rules if cable is available to at least 70 percent of U.S. households and at least 70 percent of those homes actually subscribe to a cable service.

But, if that's the case, the numbers don't exactly add up in the FCC's favor, according to Sanford C. Bernstein & Co. Inc. analyst Craig Moffett.

While cable's availability satisfies the rule, its penetration rate of those homes clearly does not.

"By our estimation, cable penetration of cable-available homes is between just 50 and 54%," Moffett said, in a note issued Monday. "We don't believe any study could conceivably satisfy the 70/70 rule."

Citing early rulings on separable security and the multiple-dwelling unit (MDU) market, "this latest development makes clear that the Chairman remains strongly disposed against cable, and appears increasingly to be turning his agenda towards open campaign against the industry," he added, echoing a sentiment shared by cable operators both large and small. (See Verizon & Others Get Their Waivers and FCC Bans Cable MDU Lockups.)

Of course, it wasn't all that long ago when NCTA president Kyle McSlarrow suggested a plan that would sunset all FCC regulations in five years. (See NCTA Chief Calls for FCC Gutting .)

“Twisting statistics in order to breathe life into this rule is simply another attempt to justify unnecessary government intrusion into a marketplace where competition is thriving and new technology is providing consumers more choices, better programming and exciting new interactive services," McSlarrow told the Times.

— Jeff Baumgartner, Site Editor, Cable Digital News

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